#69 Crypto Research Like A Pro: My Step-By-Step Process for Evaluating Crypto Opportunities

Today we're going step by step through my process for evaluating new crypto projects before deciding whether to invest.

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Show Notes

This past weekend I went on a little deep dive in researching a new blockchain, a project that I'm considering investing in, and you'll see what that blockchain is later. It's not gonna be investment advice about that blockchain, but I'm gonna just use it as an example of how I go down the rabbit hole, how I learn about a new chain and decide whether or not it's something that I want to invest in or not.

Now, I spent like just a day on this basically. Maybe around four hours, kind of start to finish. And I realized like I didn't have a very specific process. You know, I've been doing this for 10 years, like exploring new chains, exploring new projects, exploring wallets.

And I didn't really have a checklist or a set process for evaluating new projects. So I figured not only was this a good opportunity for me to create a process for myself, but I can create it in a way that I can share it with you so that you have a resource and a way to check through, go through, evaluate new projects, and eventually decide to invest in them.

So while I was doing this research, I then shared the research this past weekend on the BitLift newsletter. So be sure to subscribe to the BitLift newsletter if you're looking for kind of my research and what I'm thinking about on a week to week basis. But for now, we're just going to go through the checklist. So I've never shared something like this, but let's kick it off.

[00:01:20] The Process: State A Thesis

You'll see the first step in my process is to have a thesis and I have a thesis about every investment opportunity I make. there's a post on BitLift.com about formulating your investment thesis. Be sure to check that out. I'll leave it in the show notes.

But the idea is, for me, was that I think Web3 social is an investment opportunity this coming cycle. I think that the harmonious relationship between a blockchain and a social network could lead to a very viral token, something that could gain mass, mass adoption. Probably get way overinflated and probably get like, way overvalued in that process during the cycle.

And then hopefully sell during that process. But that's the kind of opportunity I'm looking for in this cycle. So this idea of Web3 social is something I've been keeping an eye on.

[00:02:04] Awareness

And this idea of keeping an eye on the markets is really important. It's the second thing in my checklist was just awareness.

And this idea that like, when I'm on Twitter, when I'm reading crypto news, I'm keeping an eye out for conversations and use cases and people who I trust and respect who are talking about this project. I want to see this project pop up in the sort of crypto sphere over and over again. And especially while I'm doing that, I want to see some validation. I want to see some big investors.

For example, Pantera made a big investment in this chain. When I saw that, I was like, man, I got to spend a day and go deep on this. And so that's what I did.

[00:02:43] Skeptics

Something that I learned during my LUNA investment that I wish I'd done, that I made sure to add to my checklist is that not only do I want validation, but I also want to find some skeptics. Who hates the idea of investing in this thing, who thinks that it's gonna burn. I want to read through that stuff.

I want to see why they think that, and some of this stuff I'm just bookmarking to read later on my first deep dive. But I want to make sure to see what the skeptics think and understand from their perspective why this is a terrible investment. Because I might think it's a great one, they might think it's a terrible one. Somewhere in the middle is probably reality and I want to make sure to find that out.

[00:03:23] Resources

So the next step in my checklist is just to dive into the resources, right? If you haven't seen already, we're talking about the TON blockchain, which is Telegram's blockchain, and TON.org is their website. And I'm just going to dive through their website, literally their homepage, open a hundred tabs, read everything they've got for me. This is just like a simple starting point for understanding how they want me to use this blockchain. What is the purpose that they see for this blockchain?

And honestly, I'm just going to go down the rabbit hole here, have a little fun with it, read, and then eventually play around with this chain. We can see here on the homepage that they've got, they're going to talk about their different wallet options, what you can do with this chain.

Explore some of the apps, and apparently there's an app like layer here and dApp layer. Apparently like, they're trying to build the future of the internet too, like a Web3 thing, maybe like a Filecoin type of a thing, maybe an ENS type thing. They've got storage, obviously a storage system. So there's definitely something going on with that.

I'm going to just open a ton of tabs, see what this thing is up to. And then at the very bottom here, there's going to be a ton of resources, things to click into.

[00:04:31] Explore the Roadmap, Whitepaper, and Docs

And now a couple of those things that pretty much every one of these blockchains or dApps will have, the first is some sort of a roadmap.

I want to see what their roadmap looks like. Have they been delivering on their roadmap? What's the plans for the future? literally at TON.org/roadmap, they've got what they've been up to over the last four-ish years, it appears it looks like. So that's a big deal. I'm going to go all the way back, find out and understand where they started, where they are today, and where they're heading.

Something else that every blockchain will definitely have and a lot of projects will have is a whitepaper. Now, damn, it looks like the TON whitepaper is there, which is the open network, it's 126 pages. The Bitcoin whitepaper is literally seven pages. So, I don't think I'm going to be able to get through 126 pages in day one, but I am going to reference it sometimes later on when we're talking about the tokenomics and issuance.

I'm going to be diving into this whitepaper to figure out how did it start, how many tokens were initially launched? How many were reserved for the team? And another thing about whitepapers, they're very intimidating and scary. They seem very technical. The first few pages literally aren't. I mean, the first page of the Bitcoin whitepaper is just Satoshi telling you what the point of Bitcoin is, why he decided to build it.

And it looks like the TON whitepaper is very similar. It's just, it's got a good introduction. And then they break into, let's see, a brief description of the TON components. What are the components? It's a peer to peer network. It's a distributed file storage system. It's a proxy anonymizer. Anonymity, Anomizer, something like that.

There's a lot of different things going on here that aren't typical in every blockchain. So I'm going to definitely want to read, at least during this stage, the kind of intro to the whitepaper. And later on, I'll dive a little deeper looking for specific topics.

And then, hopefully at some point, if I stay on this trajectory, if I stay going down this rabbit hole, I'm going to read the whole thing.

So let's head back to our checklist. Whitepaper. Docs. Docs are important. Every one of these crypto projects will have some sort of technical docs, usually for developers, but the intro to it will simple. It'll be kind of like the developers explaining to developers the point of the chain.

And something I'm looking for in the docs is just, does it seem professional? You know, some of these are just like in terrible English, the links are kind of all over the place or broken links. That means either A) it's very, very early in the project, or B) they're just, they're not putting enough resources into creating that developer community, which is vital to the longterm success of any project. So I like to poke around the docks, make sure that they're taking them seriously because they need to.

[00:07:08] Check Out the Team & Founders

And lastly, back to my checklist. I'm going to look up the team and the founders and see what they're all about. When I was going through the research on TON, I found a couple of interviews with the founder of Telegram, who also launched the initial TON blockchain, and I just added a couple of videos and interviews to my watch later on YouTube, queued up a couple of podcasts with interviews from the team.

And I want to get to know them. I want to hear from their mouth, what their goals, what their dreams, what their hopes are for this chain. Could they be big fat liars? Yeah, maybe, but I want to hear it from the horse's mouth. What is the vision?

[00:07:41] USE IT...and Explore the Community

So let's check off a few of these. We've made it, we've made some progress here on our checklist, all the resources now we've checked through. And the next step after kind of like reading through their website and poking around everywhere I can is to use the damn thing. I always say like, BitLift is all about, we don't just stack crypto, we use it. And using a project, using a blockchain, using a dApp, using a wallet, you can't understand the thing until you've used it. If you're not using it, you shouldn't be investing in it. That's fundamental to my process.

So I learned about some of the wallets while I was poking around the site, I got it fired up in my Telegram app. I'm using like, the wallet bot. And I poked around some of the dApps that it recommends.

And while I was playing around with this, I bought like, a .ton DNS. Which is like kind of like their ENS kind of a thing. I made sure to lock one of those in and just play around with the chain, play around with TON the token, play around with what they say is one of their most popular wallets.

And while I was doing that, I also hopped into the Telegram community about the TON blockchain. I want to dive into the community, ask some questions. See if people respond, see what kind of chatter is going on in that community. Is it just all like, pump boy stuff? Is everyone just talking about price or are people talking about building stuff?

Are they talking about creating? Are they talking about NFTs? What are they doing with this thing and how do they talk about it? Are these channels busy or has there not been a message for a week in there? These are the kinds of things I want to make sure that there's an active community here.

With Telegram, there definitely is and was, so that made me happy to see any questions I asked. Boom. The people were all on top of it, and so diving into the community is a really important part of this process. Usually it comes early because as we're going to do so much more research, you're going to have questions, things that you just can't find the answers to. And instead of like, asking AI, go ask the community. It's a good way to kind of vet them and see what they're all about.

[00:09:35] Comparable Chains and Projects

So after community here, I've got comps. Another term, a word, is like comparables, right? This is something you do like, when you're buying a house or selling your house. You're trying to run some comps, see what it's worth. In crypto, it's no different. We're going to run some comps.

The easiest, fastest, most obvious way to do that is using CoinMarketCap. And you can see here, this is the list of every blockchain and every project in all of crypto sorted by market cap. How much value does this token hold? And TON is the eighth largest crypto by market cap. You can see here that it's got an 18 billion, with a B, yes, dollar market cap putting it in the eighth spot.

So it's already had, it already has a massive, massive market cap. And it's at the top towards the top of this list, you know, not far from Solana, not far from Ethereum and Bitcoin. Actually, it is pretty far from Ethereum and Bitcoin. Let's run these comps, right?

So TON is 18 billion. Solana is 75 billion. I think when I actually looked at this, Solana was, or when I originally looked at this, Solana was 64 billion. So it was like, TON is about, was about a quarter the size of Solana. That's kind of exactly what I'm looking to figure out is, if TON became as big as Solana, for example, that would be a 4X. That'd be 4X in price. Currently, the price is like $7.30. We'd be looking at about a $24 per TON price tag if Toncoin got to the size of Solana.

So that's like a 4X from here, and a 4X is really, really nice. That's what I'm looking for, I'm looking for growth. But something to definitely consider when you're running these comps is that as the cycle evolves, as all of crypto gets more and more value, US dollar value pumped into it, that's going to raise the tide. That's going to raise all the boats. It's going to raise the value of all the cryptos.

So yeah, maybe it's just a 4X if it reaches Solana, but also during this process, Solana could 10X. So yeah, 4X to Solana, but Solana 10Xing, where does that leave us in terms of market cap? Are we talking like hundreds of billions of dollars for Solana? Hundreds of billions for Toncoin? What could the price look like in a scenario like that?

This is what running the comps is all about. I want to make sure that there's a lot of room to grow and I'm going to keep tabs on that during the cycle. Every time we sort of have a big pump day, is the Toncoin going along with it? That's something I'm keeping an eye on. And running these comps is like step one in kind of figuring out whether there's room to grow here. And with TON, I think there is, I think it could be as big as Solana.

Now, something to note when I first did this comps research is that, TON is at this 18 billion market cap. That's really high. I mean, it's high on this list. Typically, I'm looking for like small caps when I'm doing some of this analysis. Usually I've invested in most of the top ones in the list on CoinMarketCap, for example.

But, and for example, like last cycle, some of my biggest wins where things are around the 2 billion market cap, which is like going to be way down here on this list, maybe in like the 25 to 50 kind of like, slots.

One thing I don't like about CoinMarketCap and these slots is that they also have Tether and USDC up here in the list, which is a little silly. It's not really an investment opportunity, it's a dollar. But yeah, I want to see these kinds of things in like the 25 to 50 range usually, but it's so important to remember that just because a coin is big already doesn't mean it can't get even bigger, right?

Bitcoin is a 1.2 trillion, TRILLION, dollar asset. Ethereum is 400 billion. If TON got to the size of Ethereum, what would that do to the price? Massive, massive opportunity. I don't think it's going to get to the size of Ethereum. I don't think it has, it's not very comparable to Ethereum. I think it's closer to a Solana comp, but that's what I'm looking for.

[00:13:32] Demand

All right. So back to our checklist, we just ran some comps. Next, I want to think about where is demand going to come from for this token? Is it just for voting on stuff? Like voting, like DAO votes? That's kind of boring. That doesn't create a lot of demand and value for the token because most people don't care about governance. Or, is this something that you have to spend some of the token in order to use the chain, and does the chain have a bunch of features that require you to buy and hold and use this token in order to participate.

That's what I want to look for, and that's something that I actually did find in the TON token. They, not only is it used for processing transactions, sort of like ETH and Bitcoin is used as gas. But also like they're building a lot of services on top of Telegram that you're going to need TON in order to use.

For example, I stumbled on a forum post somewhere about how in order to advertise on Telegram, they're only going to accept TON as payment. That's really an interesting opportunity. They're creating this DNS thing, which is sort of like an ENS thing. ENS makes hundreds of millions of dollars in revenue. That's an opportunity for demand for TON.

They've got the storage thing. It's the size. If it becomes a size of Filecoin, Filecoin is a multi billion dollar asset. So maybe it sucks some value out of there. Where's the demand going to come from? I want to see strong demand. So that's something that I look for on every project that I consider investing in.

[00:14:54] Usage

Next, I want to look at usage. Now, usage, usually you can determine the usage. There's usually like a block explorer where you can see some charts about the usage. Let's see, here on TON, they didn't have it in the block explorer. But you can see here, this is the number of transactions on the TON blockchain.

And you can see it started back in December 2023. It was very, very low, a couple hundred thousand per day. Had this massive, massive spike when it launched, well, not when it launched, but like when it launched this year, in their new version of it in January of this year. Had this massive spike, and then it's kind of been up into the right. This chart is up into the right.

Transaction volume is increasing every single day at a pretty steady clip. That's what I want to see. I want to see usage growing. I want to see demand growing and usage growing. People are using this more and more and more. And, sort of as Telegram grows, so will usage of the TON blockchain I think.

As a stark contrast to this, another project I was recently diving into is something I've been investing in for a while, but keeping tabs on is Frax. Frax just launched a layer two called Fraxtal. I wanted to see how Fraxtal was going, hopped into their block explorer and look at this network utilization chart. It's not the transaction volume chart, but network utilization, how much of the network is being used. It is flat. It's really sad, actually. I want to invest more in Frax. I believe in what they're doing, but no one's using it.

That's really important. Even though like my gut tells me like, man, this is a project that has a big, bright future, the data disagrees with me. And sometimes that's how it's going to go. And so I'm not going to be allocating more money to Frax right now because it's just not growing.

TON on the other hand, it's growing. Let's see where it's going.

[00:16:40] Active Addresses or Accounts

One chart that I see a lot of analysts talking about on when they're evaluating different chains, it's like the number of accounts or number of active addresses. You know, I don't really read too far into this. You can see the number of accounts is growing and up into the right.

It's going to be up into the right forever, right? It's never going to dip because once an account is created, it, first of all, it costs zero to create an account. All it is is just a cryptographic key and now it's an account. And so, what? These things can be very automated. A lot of people have lots of airdrop farming accounts. Maybe one person will have thousands of accounts, very automated and systematic.

It's obviously a good thing to see like, the number of accounts going vertical. It's not something that I pay too close of attention to, but it is a metric that I see thrown around a lot.

[00:17:24] Total Value Locked (TVL)

Another metric that's talked about constantly when it comes to like, on chain metrics, is what's the TVL of the chain. TVL stands for total value locked, and pre-Ethereum days, like, this wasn't a metric we ever even considered. But now there's the tokenization of everything and massive amounts of stablecoins being pumped around. A lot of times we talk about it with dApps too. Like, if you're an exchange, what's the total value of all the tokens that are in the smart contracts on that exchange, right?

You could see how that would be an important number maybe for an exchange, for a blockchain itself. And, even with the dApps too, this, number of TVL, it's... TVL can be just very fickle. Like, if a chain starts going to shit, everyone just bridges out. Boom! You can see TVL being very, very volatile. So while it is a good thing to see a lot of, for example stablecoins moving to a blockchain, that doesn't necessarily mean they're gonna stay there. So it's something that I kind of poke around at, but it doesn't play too much of a role in my decision.

I'll probably use DefiLlama as a common place to dive into TVL for projects. You can dive into all sorts of metrics around a chain for the on chain data. You can see here on this chart, this is the TON blockchain chart. You can get the supply data, but you can also see this is the price in yellow. Moving up, obviously in relation to the TVL, which is in blue. TVL is going through the roof.

This green here is stablecoins. Stablecoins were just introduced here. It looks like last month to the TON blockchain. So I think Tether just announced that they allowed Tether on the open network. So yeah, you can see that's been skyrocketing and it looks like stablecoins is $570 million of the TVL, and the total TVL is 760 million.

So it's like, I don't know, 80 percent of all the TVL on the TON network isn't stablecoins. That's probably a good thing. You want to see stablecoin usage because stablecoins means payments and usage, and especially like real payments between people. That's the kind of transaction volume I like to see versus just lots of trading, meme coin trading kind of things, or swapping, which you'll see on like Solana, for example. So yeah, I like seeing TVL up, but it's not a massive indicator because it can drop real fast.

[00:19:34] Tokenomics

All right, back to our checklist. We're going on this rabbit hole. Maybe I'm like halfway into my research here, on this project. And next on deck is tokenomics. Tokenomics is a big, big deal. Tokenomics is basically like the study of the supply of the token. How is it issued? How many of them are there? Is it burned? How much does it, how much is used every day? How much is vesting? How much is locked up in contracts? How much was allocated to the team? There's all this data around tokenomics that you can really dive into.

The most important thing when I'm looking at tokenomics is really the supply, the circulating supply, and how much is available, right? You can see that the simple starting point for that is CoinMarketCap.

Here's TON's CoinMarketCap profile. You can see here the market cap is 18 billion. Total supply is 5.1 billion, but the circulating supply is 2.5 billion. So, all only half of the TON tokens are currently in circulation. So that begs the question, where the hell's the other half? And that's kind of the rabbit hole that you want to go down, and especially like, how are they issued, right?

Where the first like, billions of them just issued straight to the founders? Were they pre mined, for example? Bitcoin, for example, is literally the Holy Grail of issuance. This idea that anybody could hop on day one and start mining. Anyone had access to it, and this idea that anyone could participate and it was equally distributed as it was issued. And it's been equally issued over a long period of time.

That's the Holy Grail. That'll never happen again by the way, because now a big blockchain launches and there's thousands of people day one trying to hoard as much of it as possible. So this idea of nothing will ever equal the issuance mechanics of Bitcoin, but that's sort of the Holy Grail.

We want to see a fixed supply. I like to see, I mean, let me take that back. Nothing's going to be a fixed supply anymore. Ethereum isn't a fixed supply. Bitcoin is really the only fixed supply that exists anymore. But what are the mechanics of how new issuance will happen? What are the mechanics of how it will be burned?

I saw that Toncoin, for example, they announced some sort of like...Ethereum has an EIP 1559, which is this idea that fees are burned in every transaction. And so it looks like Toncoin did something similar where half of the fees are burned in every transaction.

So, they envision this world where it could possibly be a deflationary token where less Toncoin is issued to validators every day then what is burned so it can be deflationary, right? And if it grows and grows, maybe if it 10X's in usage from here, there could be a world where that 5.1 billion of tokens starts to go down. It starts to get burned, that's what I want to see.

I don't want to see this thing be the US dollar and be inflated for all of time and keep the total supply going up forever. I want to see a strong mechanic around how it was issued, how is it going to be burned, how much are validators going to earn? And I want to make sure that this thing isn't going to get inflated away because, as you know, if you hold something like the US dollar, the longer you hold it the less valuable it becomes. That's not a good investment opportunity. Investing in dollars is always a bad opportunity, so is an inflationary crypto.

[00:22:41] Vesting & Unlocks

One thing it's important to look at when you're looking at supply is this kind of vesting and unlocks. A lot of projects have vesting over time, especially to the founding team, to the investor team. A lot of times in their docs, they'll have a pie chart of how many tokens were allocated to various parties. And then there'll be some sort of chart showing how it will be issued over time.

There's actually a really good site I've used before called Unlocks.app that kind of breaks this down for every chain. They didn't have it for TON, but here's Optimism for example. It shows the supply, it shows the circulating supply. And then it shows, for example you can see here that Optimism, OP, only 27 percent of the token is in circulation. I mean, where's the 75 percent of it, right?

And this site will break down for you where they are. They're locked, and it'll even show over time when the big unlocks are going to happen. You can see here for optimism on this chart, it's a little tricky to see, but there's about to be a massive unlock. Maybe it just started, actually. It probably happened recently. And then every year there's going to be more massive unlocks. Yesterday there was a billion. Today, there's 1.75 billion tokens unlocked. In the next couple of years, there's going to be over 3 billion unlocked, then 4 billion.

So yeah, you want to make sure you stick on your calendar when these unlocks are happening. See who's getting these unlocks and why, and make sure that you're not caught holding a coin that's just about to have a massive inflationary moment the second you hop into it. You might want to even see if it aligns with the market cycle, is another way of thinking about it. I don't care if there's an unlock in 2026, for example, because I might be dumping this coin during the top, which I think is going to be in 2025.

[00:24:22] Staking

So back to our checklist, we just covered tokenomics, supply, issuance, vesting. Percent staked is just another interesting metric. In Ethereum you want, like a lot of the supply is staked right now, for example, they're even afraid that it could go up to 90% so they're implementing new things to make sure that not too much of the supply is staked.

Just how much of it's staked shows how much belief there is in the project, and it just shows how much demand there is for participating and securing this network. It's something I like to see. Not super important, because like TVL, it can be fickle. People can just unstake and dump.

Sometimes unstaking takes time, let's get into that actually next because I want to know as part of my checklist, if I buy this token, can I earn some income on it? Can I help it grow? Can I stake and help secure the network while I hold this thing?

The answer to with TON was yes. They've got a whole page about becoming a validator, how it works, what the APY is and how it works. What I did discover however is, to be a validator on this network, you need 300,000 TON tokens. That's like, millions of dollars worth of TON. Not what I'm going to be aping in with my initial investment, that's for sure.

So I want to see is there liquid staking? Is there pooled staking? What are the opportunities there? It turns out that there is. Turns out that as of right now, there's about 350, 390, I forget, validators on the network. So they're not going for like, thousands and thousands of validators. They're going for somewhere in the middle, somewhere between Bitcoin and Solana basically.

Solana wants to have very few to keep it super fast. Bitcoin wants to have the maximum as possible because a block is only 10 minutes. TON looks like they want to be somewhere in the middle there. There is 400 validators, that's a reasonably decentralized number I'd say. But, it's not something that everyone can participate in.

So they do have pooled mining, and it looks like the APY is also another thing that I'm going to check while I'm doing my research on staking TON. Staking this project, generating income on this while I hold it. The APY is about 3.09 percent right now, which is pretty low. But something that people don't consider and something I've talked about many times, especially on socials. If it's 3% right now, but let's say the price doubles to $14 a month from now, everything I earned 3 percent was as if I earned 6%. percent. Let's say it triples. Everything I've earned up to that point, the APY has tripled up to that point. So, people don't consider this when they look at what the APY is.

I want to grow my stack, especially if I'm just holding it and not going to be using it and DeFi-ing it. How can I grow this? How can I put it in DeFi? How can I put it to work to generate income in the safest way? Very important. I don't want to put it at too much risk. Staking at the base layer of a blockchain is basically the safest way you can do it.

I don't have 300,000 TON, so I'm not going to be able to do that. But, maybe there's some big pools, some big stakers, that I can allocate to. Maybe there's liquid staking options. I'm going to dive down those rabbit holes and figure out how to stake it.

One last point with staking that's super important is, "What's the lockup if I'm going to stake?" One thing that I've learned the very hard way in past cycles is if it takes a month to unstake, well, I could miss my entire window to dump at the top and to sell. Or if there's something goes wrong, I want to maintain as much liquidity as possible. Keep this liquid.

Is it worth that 3 to 6 to 9 percent APY if I'm going to be locked up? If this thing's doubling and tripling is 6 percent worth it? Is 3 percent worth it? That's a question you have to ask for yourself. It's based on kind of how much risk you're taking with your staking strategy. And, I don't want to see it locked up.

It turns out with TON, there's a 36 hour lockup. That's, I liked it that's how short that is. I need to make sure that's a fixed number and not something that increases as more and more people stake. That's kind of how it works in Ethereum, for example. Right now, the exit queue on Ethereum is basically empty and you can unstake the same day. But if everyone starts on staking, it's going to go to weeks, it's going to go to months. And, you could get stuck with your ETH staked.

So, that's something I'm going to make sure as this cycle progresses, no matter what I've got staked, I'm going to start getting liquidity. I'm going to start unstaking because I don't want to get stuck with locked up coins that I want to sell. That's bad news.

[00:28:41] Exchanges & Liquidity

All right, back to our checklist. We talked about staking. We talked about the lockup periods and making sure to avoid it. We talked about the APY within it. I think after going through this research, maybe I'm ready to allocate some capital. Maybe make an initial investment. And so, where am I going to do it?

That's a big question. Some of these projects and chains, especially the ones that are very low market cap, they can be hard to track down. If it's not an ERC-20 token on Ethereum, for example, if it was I could just use Uniswap or any sort of, I like to use Cowswap. You can use one of these exchanges that everything just has a pool, any project would have a liquidity pool available for swapping that token.

But, maybe it doesn't have a lot of liquidity in it. If I want to allocate tens of thousands or hundreds of thousands of dollars to this project, can I use this pool? Can I use this exchange? I want to make sure that there's enough liquidity there for me to enter and exit my position eventually.

So I'm going to do a little deep dive on the exchanges, and a simple place to start with that is on CoinMarketCap. They literally have a markets section for each project. So I can see here that like DeDust, which I've never heard of. STON.Fi, never heard of. OKX I've heard of, but don't have an account there.

I'm going to figure out where to buy. I want to make sure that it's a trustworthy source, and for me personally, if it's on Coinbase or if it's on Kraken, as far as centralized exchanges go, those are the ones that I use. Or, I want to make sure that it's on a decentralized exchange that I'm familiar with. I don't want to be bridging large sums of money to strange chains that I've never used before, DEXs that I've never even heard of before. That's a bit problematic for me. That's the next rabbit hole I'm going to go down when I'm trying to figure this out.

And with Toncoin, it turns out as I was doing research on that, that you can bridge TON to Ethereum and that there's liquidity pools on Uniswap and in other places to just buy wrapped TON. So that was an easy choice for me, that's the way that I was going to start building my position.

[00:30:38] Wallets

But, that's the next step is figuring out - where the hell am I going to buy this thing? And once I've bought it, How am I going to secure it? Playing around with a hot wallet and flinging coins around to buy small amounts of things is fine. But if I'm going to start building a real solid investment position, how am I going to store it? I want to make sure to not only self custody, but I want to self custody in a hardware wallet.

So I dug into what wallets are, available for the TON chain, and it turns out there's quite a few of them but only one of them was available to use with Ledger. And so that was Tonkeeper. Actually, there may have been some other ones, but this is the one that popped up most often. They've also got a browser extension. I do most of my big investing on a desktop with my hardware wallet, so, that's kind of what I chose to do.

And actually right now, since I aped in as a wrapped ERC-20 token, that's just held on Ethereum. That's easy. But at some point, if I decide to stake these tokens, I'm going to need to bridge them to TON. I want to make sure to use my Ledger, make sure that I have the right tools, the right wallets in place, and I'm comfortable using them in order to hold this position for the longterm.

[00:31:40] Ape In A Standard Allocation

And so back to our checklist, I've done some research on my wallets. I'm ready to ape in a standard allocation, right? What is my standard allocation? That's a topic for another podcast, actually. Maybe we'll talk about that soon. But my initial, what is it that I, the amount of money, that I put in to a new position? Usually it's like around a third or a quarter of what I could fully invest if I keep going down this rabbit hole and keep investing.

But if I'm going to decide that, how do I decide that? I need to check out the chart, man. I always crunch the charts a little bit. And so this is the TON chart, this is the weekly chart. The first thing I'll do is I draw like, a couple of sections. Like, these are areas, these two purple sections at the bottom here. This is like zones of where, man, if it falls into this zone it's a buying opportunity. If it falls into this zone, it's another buying opportunity.

Maybe if it hits like, the top of it, it could, maybe it'll bounce off of it. Or the bottom of it, maybe it'll bounce the other way. So this is like very long term like areas that I want to keep an eye on, and then I dive into the daily. And I'll see like, on a day to day basis, how is the chart looking?

And to be honest, I didn't like this line that I drew. It sort of shows that we've been up and to the right, very bullish, but then we had this massive, massive drop below that support line. And we've been bumping up against it as a ceiling, it's become resistance. That's never a good sign. That means we could resist right off of there and start heading back down.

I don't love that. Still, if I'm interested in putting a position in one of the first things I do is I just put in my very first allocation because we also don't know. Technicals, they lie all the time. It's not necessary that we're going to dump here. It could boom right back above that support line or that resistance line.

So I'm going to keep an eye on that. This is my initial chart. I didn't love this, but it didn't like suade me away from making an allocation.

[00:33:28] Final Thoughts

And so that wraps up our checklist here. And I've just aped in, I've bought my coins, I've got my charts, I've checked off everything. A lot, along the way, I've definitely bookmarked some stuff, right? I bookmarked some interviews I want to watch with the founders. Some skeptical articles from various analysts that I want to make sure to read and dive into. See why they're skeptical of this blockchain and make sure that what I believe aligns with my thesis, isn't going to run into problems based on things that I haven't even learned about yet. I've also bookmarked the whitepaper. I love reading whitepapers. I know it can be a lot of work, but that's where you can really learn a lot about these projects.

So hopefully this is super helpful. I know this took quite a while. Like, man, we're in this like a half hour, talking about this process. But, I spent four hours really diving into all of these steps. if you're just getting started, it could take you a little longer. Maybe put a couple days of effort into this instead of one day.

And now that I'm done all this research, I'm going to be keeping a close eye on this project and I'm going to maybe reallocate, especially as we reach various sections in my chart. And I'm going to add on to this position. I'm going to start timing.

When am I going to sell it? That's a different question. Not really on here, but for me it just comes down to where we are in the cycle. It's not necessarily a price prediction, it's a cycle timing prediction. Maybe it's about where Bitcoin is in the cycle. Maybe where Ethereum is in the cycle. That's where I'm going to plan to dump all my alts, all my positions that I don't have very long term horizons on. And the reality is, the only projects I've got that for these days is number one, Bitcoin, maybe Ethereum. It's still there. I've been lightening my load on Ethereum. That's okay.

Hopefully this process helped out a lot. if you have any questions, hop into the BitLift Discord, hit me up. Hopefully this checklist is helpful. Go tap on the show notes, it's just totally free. Just go look at the checklist. I'm going to flush it out. Try to add all the things that I talked about underneath one of these checklist items and make this thing super useful.

If you have any ideas for things I should add to this checklist, or resources, tools I should be using on my process, throw 'em my way. Love hearing from you guys. That's it for now, best of luck in this cycle, and I'll see you around.